Child Tax Credit and 6419 Letter for Unmarried Individuals with One Child between Them.

[kjrrefocus]

I can't find anything in the regulations addressing the issue of unmarried parents claiming a child as a dependent in alternating years. One parent claimed the child as a dependent in 2020 and received the Advance Child Tax Credit in 2021 based on how the dependency exemption was reported on her 2020 return. She received a 6419 letter confirming that she received advance payment of $300/month ($1,800) for this child in 2021. However, because the child lived with the father for more than 6 months in 2021, the father is able to claim the HOH status and claim child as a dependent on his 2021 tax return. On the 6419 Letter smart worksheet for the father's return line B1 asks for Advance Child Tax Credits received from Letter 19 which was -0-, but he did not, in fact, receive a Letter 6419. On line C1 he's asked to indicate the number of qualifying children from letter 6419 which I've indicated as -0- even though, again, he did not receive a letter 6419. By entering -0- on both lines, he is allowed a full refundable Child Tax Credit of $3,600 (noted on lie 28 on the Form 1040).

My concern, of course, is that the child"s mother received the $1,800 advance payment based on her 2020 return (she has her own preparer) and I find nothing in the regulations explaining how to reconcile this issue (an $1,800 duplicate payment to two separate individuals for the same child). As i read various commentaries partially addressing this issue, one question that came up is "What if I got advance child tax credit payments and I wasn't eligible? Will I have to pay it back?" The response is that there apparently is a safe harbor program for certain taxpayers who received more advance Child Tax Credit  than they qualified, and apparently, this program can reduce or eliminate the amount of advance payment required to be repaid. This is all fine and good, but there is a "Caution Statement" in Part 1-B of  Schedule 8812 that if the amounts reported on Letter 6419 are inaccurate, the processing of the return will be delayed. With all the reports of the many problems with the IRS, I feel it's essential that everything on the father's return be accurate to hopefully avoid an unnecessary delay of my client's refund which, based on recent history, could be a year or more.

Again, I'm concerned because my client, the child's father, will possible be penalized through no fault of his own. Any thoughts out there in addressing this issue will be greatly appreciated? Maybe I'm missing something here, but there seems to be little or no information dealing with the issue of unmarried and separate parents with dependent children and the child tax credit/advance child tax credit.

[Just-Lisa-Now-]

Extremely common situation with these payments and parents that trade off each year.

The parent that ISNT claiming the child for 2021, should have opted out of the advanced payments, or risk having to repay them.  They were informed about this option in the initial letter they recieved prior to the payments beginning.

[dkh · Accepted solution]

The father reports what he received which you indicated was $0.  And yes, if the mother doesn't have to pay back the advance she received due to her income being below the threshold requiring her to do so there is "doubling dipping" allowed for the child.   

There shouldn't be any processing delay for the fathers return but who knows with the chaos going on at IRS.   

[qbteachmt]

"I can't find anything in the regulations"

Are you signed up for IRS e-newsletters? This comes to your email inbox routinely.

Example:

https://www.irs.gov/newsroom/tips-for-parents-who-share-custody-or-alternate-tax-benefits

[kjrrefocus]

Thank You!! Your response was very helpful. It's clear to me, based on your response (really makes sense), that the issue of the advance child tax credit received by the dependent' child's mother is her problem. She should have opted out of the advance payments, but now she has to deal with the consequences, hopefully with the help of her tax preparer.

[kjrrefocus]

Thank you. Your response was very helpful. I do hope everything works out to the ultimate benefit of both the father (my client) and the mother.

[kjrrefocus]

Thanks. I went to the site you referred to me and it was quite helpful.